November 8, 2013

Vietnamese seafood firms seek foreign investments

Companies, involved in these decisions, include the

Meanwhile, a senior executive of Minh Phu Group JSC has said that Minh Phu - Hau Giang Seafood Processing Company Ltd (MPHG), where Minh Phu holds 90% of capital at, would be turn into a joint stock company after the issuance of 26.5 million shares. The share issuance will help raise the chartered capital from US$28.5 million to US$41 million.

Prior to that, Minh Phu rejected a cooperation deal with Thai partner, CP Foods, despite an offered share price of US$2.40.

Go Dang JSC (AGD) has sold 49% of stakes to foreign investors and announced its intention of delisting.

In early 2012, Cholimex sold 19% of its stakes to a Japanese food company.

While other enterprises, which make products for domestic consumption, fear that their brands would decline after selling stakes to foreign investors, seafood companies are not too concerned. Most Vietnamese seafood companies make products for export which bear the brands of importers.

"A lot of seafood companies are now small scale, which are the small aquaculture households or traders. For them, the presence of foreign investors in the companies, which helps improve the corporate governance skills, is really very useful," Dung said.

According to Dinh The Hien, a finance and banking expert, the seafood production chain is a global value chain, which comprises of the breeder production, feed, aquaculture, production, processing and distribution. Hien believes that cooperation with foreign partners would help Vietnamese companies to increase value in the seafood chain.

While Nguyen Trung Thang, president of Masso Group, sees the necessity of foreign investments, he warns that such action can lead to a domination of the local seafood industry and market prices by foreign investors, citing Vietnam's coffee indsutry as an example.